A new report from the National League of Cities takes a close look at how the recession has shrunk city budgets, forcing them to make layoffs, roll back infrastructure projects, and make cuts to public services.
Budgets have shrunk through two channels. First, cities have lost revenue in a number of key ways: the depressed housing market reduced property tax collections, declining wages have affected income taxes, and depressed consumer spending has curbed sales tax revenue. State and federal aid has also dropped. At the same time, they’ve made big cuts in expenditures as budgets have been squeezed.
How have city governments coped with these changes?